Societe Generale aiming for greater profit from investment bank division

Societe Generale SA is targeting a higher profitability for its global banking and investor solutions unit, which includes investment banking and asset management, in the coming years while keeping costs and risks under control.

France’s third-largest listed bank by assets has been overhauling the unit, reducing costs and risks in its global markets business. Last year, it decided to cut back on risk-taking in structured products tied to the performance of stocks and bonds after taking a hit from coronavirus-related trading losses.

SocGen said it is now time for global banking and investor solutions to achieve a higher profitability — a key target of the midterm strategy for the unit it presented on 10 May. It also wants to make its results less exposed to wild changes in the market.

The bank is targeting a profitability on normative equity, or RONE, for the division of more than 10% from 2023. This metric stood at 0.4% last year and 6.3% in 2019.

Besides gains in profitability and lower costs, the bank will also keep risks under control.

“The group intends to press on with stringent risk management of both market and credit risks, notably against a backdrop of lower market risk appetite, and prudently manage its counterparty risk,” SocGen said.

“It furthermore aims to ensure that all risk categories are diversified healthily across its businesses,” it said.

Write to Pietro Lombardi at [email protected]

This article was published by Dow Jones NEWSPLUS